The cost of second best pricing and the value of risk premium

Private provision of public infrastructure (PPP) is meant to give incentives to increased efficiency in construction as well in operation and maintenance of the infrastructure e.g. within the transport sector. Efficiency is not only (private) economic efficiency, but also social efficiency e.g. social marginal cost pricing of use of the infrastructure.Is it possible to design contracts concerning payment mechanisms and financial instruments for transport infrastructure that will stimulate social efficiency and optimal allocation of risks between parties? The paper discusses whether different targets can be met and whether compromises may lead to acceptable second best solutions.PPP implies an opportunity to let the user-payment give desired incentives in the form of Social Marginal Cost Pricing (SMCP). A PPP project is a set of contracts and agreements between several parties, including the Government, the private contractor, subcontractors, banks and infrastructure users. These contracts should be designed to give the right incentives to the parties to achieve optimal risk allocation and utilising of resources.Long contract-periods are a common feature of PPPs. The paper examines the way that financial solutions should be designed to achieve the goals for the PPP-projects concerning economic and social efficiency. The expected size and variation of the income stream from the project will influence the loan conditions offered by banks concerning interest rates, guarantees and repayment and also the ability to attract investors. The balance between equity and loans again influences the conditions of the loans. An additional problem is asymmetric information between parties. The private contractor usually knows more about the task than the Government (hidden knowledge), and the Government cannot have full knowledge of the efforts of the contractor (hidden actions).     

Determinants affecting ferry users’ waiting time at ferry terminals

Transportation - The paper develops a model to examine how different factors influence ferry users’ waiting time at the terminals. The estimations are based on interviews of 10,952 Norwegian...     

Carbon flows in Baltic Sea food webs — a re-evaluation using a mass balance approach

The brackish Baltic Sea has been seen as particularly suitable for studies of food webs. Compared to fully marine ecosystems, it has low species diversity, which means fewer trophic linkages to analyse. The Baltic Sea is also one of the best-studied areas of the world, suggesting that most data requirements for food web models should be fulfilled. Nevertheless, the influence of physical and biological factors on trophic interactions and biogeochemical patterns varies spatially in the Baltic Sea, adding considerable complexity to food web studies. Food web structure and processes can be described and compared quantitatively between areas by estimating the flow of matter or energy through the organisms. Most such models have been based on carbon, though studies of complementary flows of other elements limiting production, such as nitrogen and phosphorus would be desirable. However, since ratios between carbon and other elements are used in calculating these flows, it is crucial, as a first step, to quantify the flows of carbon as accurately as possible.In this study, we used the EcopathII software (ver 3.1) to analyse models of carbon flow through the food webs in the three main areas of the Baltic Sea; the Baltic proper, Bothnian Sea and Bothnian Bay. A previously published study on carbon flow in the Baltic Sea [Elmgren, R. 1984. Trophic dynamics in the enclosed, brackish Baltic Sea. Rapp. P.-V. Reun. — Cons. Int. Explor. Mer. (183) 152–169.] was complemented with the data on respiration and flow to detritus [Wulff, F., Ulanowicz, R. 1989. A comparative anatomy of the Baltic Sea and Chesapeeake Bay ecosystems. In: F. Wulff, J.G. Field, K.H. Mann (Eds.), Flow Analysis of Marine Ecosystems: Theory and Practice. New York: Springer-Verlag.] in order to present complete mass balance models of carbon. The purpose of re-evaluating previous models with new analytic tools was to check how well their carbon flows balance, and to provide a basis for improved mass balance models using more recent data, including nutrients other than carbon.The resulting mass balance networks for the Baltic proper, Bothnian Sea and the Bothnian Bay were shown to deviate from steady state. There was an organic carbon surplus of 45, 25 and 18 g C m⁻² year⁻¹ in the pelagic zones of the Baltic proper, Bothnian Sea and Bothnian Bay, respectively. The Ecopath network analysis confirmed that the overall carbon flow was highest in the Baltic proper, somewhat lower in the Bothnian Sea and much lower in the Bothnian Bay. The only clear differences in food web structure between the basins was that the average trophic level was lower for demersal fish in the Bothnian Sea and higher for macrofauna in the Bothnian Bay, compared to the other basins. The analysis showed weakness in our current understanding in Baltic Sea food webs and highlighted areas where improvements could be made with more recent data.     

The influence of interview location on the value of travel time savings

The value of travel time savings (VTTS) is used as input in traffic forecasting models and cost-benefit analyses, and it is typically estimated in stated choice studies in which preferences are derived. However, preferences are affected by the recollection of prior experience, and evidence suggests that the recollection of an event is different than the actual experience. Although the choice of interview location is likely to affect how long it has been since the respondents travelled, evidence is somewhat limited on the influence of interview location on VTTS. This paper investigates the role that interview location plays in the VTTS of ferry travellers. We find that the mean value of headway time savings is significantly higher among respondents interviewed onboard ferries than among those interviewed at home. The mean value of onboard time savings is significantly lower among those interviewed onboard the ferries than among those interviewed at home. Failure to take into account the influence of interview location might lead to biased estimates. To the extent that such biased estimates are used in cost-benefit analyses, this bias will affect the calculated welfare effects of changes in frequency and speed on scheduled passenger transport, resulting in suboptimal allocation of public resources.